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A few weeks back, I came to the realization that selling movies on the internet was no different than any other kind of eCommerce. So using the same forumlas I utilize to market my Action Packs, I plugged some numbers into an internet marketing ROI calculator.

I did this because the prospective investors in my life often ask how their money will be spent and recouped. Given the discriminatory nature of traditional distribution, I wanted to see what it would take to make internet distribution a viable sales channel. So I started crunching numbers with one assumption – if filmmakers can make the numbers work for each project, filmmakers would no longer have to rely on the glaringly flawed: “Gee, I sure hope we get into a film festival and garner a great deal” distribution strategy.

That strategy is a lottery. Not an investment. And it’s outdated.

So I got down to business and crunched some numbers. To my delight, I found some answers – but after publishing my article on internet movie distribution, many people kindly wrote to tell me that my numbers are incredibly unrealistic (and that is putting it nicely.) And I totally agree.

Looking at my results, it became quite clear that recouping even a measly 1M dollar budget by selling $20 dollar DVD’s in Amazon, relying solely on Pay Per Visit advertising  at  $.05 cents a visit, while, at the same time crossing our fingers for a 1% conversion would require that, firstly – you would need to sell 100,000 units (which allows for a 50% marketplace fee). And secondly, assuming a 1% sales conversion, to get these numbers, you would need 10,000,000 site visitors, visiting your website. (Yes, ten Million people) – which WE ALL AGREE is outlandish!

But in all of the debate, despite the negative responses, and the haters who took special care in hating me, and the seasoned producers who took meticulous care in ignoring the math and instead, decided to point out my spelling mistakes and poor use of grammar – Despite all the backlash – very few people (OK, pretty much nobody) even tried to offer a better solution.

So I decided to provide YOU with the chance to save the independent movie industry. If YOU can answer the following questions, you will help push indie filmmaking into the next era. In fact, YOU will help us make indie filmmaking a profitable business.

Are you ready to change the world of independent filmmaking forever – for the better? Here is your chance!

Here are the MAJOR Filmmaking Math Problems:

1. With no promise of a traditional distribution deal, how do filmmakers justify a budget large enough to pay freelance day rates, while at the same time project enough direct DVD and VOD sales to recoup the initial investment?
   
2. And assuming only 1% of your website visitors buy your movie, then how many people must visit your website so that 1% recoups your initial investment? (Don’t forget to include marketplace costs.)
   
3. How much will this cost in advertising?
   

The Formula:

To possibly help you,  I provide my formula (below) in hopes someone with more math experience can test and tweak until this starts to make sense. Here is what I have so far:

Movie Internet Marketing Formula

U = Unit Sales Goal.
A = Amount you pay advertiser per website visit.
C = Projected conversion percentage rate.
X = Number of Visitors Needed.

(X)C = U
EQUATES TO: X= ?
THEN:  X(A) = ?

–>Thank you. Please click here if you would like to comment or offer your own formula and results for the world to see!

Jason Brubaker Got Punched-Out!! (Wii)

When I published my article on leveraging VOD sales to finance your movie, I had no idea that a simple internet marketing formula for filmmakers would be such a polarizing issue. I can’t tell you how many Los Angeles based movie producers responded negatively through email.

One guy even told me my grammar sucked.

So to clarify, I was not trying to ruffle any feathers. I was simply applying a standard internet marketing ROI formula to a product available through video on demand. Nothing more.

All of this was based on the premise that selling movies on the internet is no different than selling any other downloadable product (where you are lucky if you convert 1%)

This is based on experience. I learned how to market and sell movies on the internet when our first feature did not garner a traditional distribution deal and we ended up selling on Amazon. Back then I personally knew a bunch of filmmakers in a similar situation – all had titles but no deal. Since that time, even more filmmakers have flooded the market with titles. Couple this with the decline of various DVD sales channels, and suddenly a crappy $25 backyard indie can now share virtual self space with $25M movies.

For those of us who produce features without any sort of pre-sales, instead of telling prospective investors “If we are lucky, we might get into festivals and garner a distribution deal.” We can finally reach our audience without asking permission. And to me, this makes the indie movie business like any other small business… Produce a product and then market, sell and distribute your product.

This said, I totally agree with one of the readers who said my equation for returning a 1M dollar budget was preposterous. He was right. Anybody who thinks you can magically generate the mass amount of sales needed to recoup even a 1M dollar investment without a substantial outlay of cash towards advertising is mis-guided. Which is what those formulas reveal.

I wasn’t trying to present an indie movie panacea. We are all trying to find profit in business competing with (what I think is the indie movie equivalent) of sweat shop labor produced goods. So in terms of the person who said I’m trying to seduce “starry eyed producers,” I would say that finally having non-discriminatory VOD sales channels like Amazon, and especially iTunes finally gives us producers something to get excited about.

Whether or not we can find the marketing formula to justify our budgets remains the ongoing challenge. I for one am working my butt off to find the balance between budget and the amount of marketing needed to recoup the money – and hopefully create an ongoing stream of revenue.

My model of moviemaking isn’t for everyone. In fact, many of you have great relationships with distributors and are still making money in DVD and theatrical. Awesome! But if you are a filmmaker still relying on the “Sundance Dream” to recoup your budget – or if you are a filmmaker with a title collecting dust in your bedroom closet, I hope my article offered a little optimism.

At the same time, feel free to share your own thoughts on VOD distribution.

And spelling an grammatical tips are welcome from filmmakers too.

I am currently working on the release of our first feature documentary called Toxic Soup and I can tell you that things are changing daily out there. The world of distribution as we once knew it – well, it’s gone. Fortuantly, I know a thing or two about getting some ROI on movies via internet self distribution.

I am working with some folks to create a one-stop-shop for those of you who wish to market and sell your movie so you don’t have to settle for a crappy deal. There is enormous need for it. I forget some times that most filmmakers would rather focus on making movies and let someone else handle the marketing and sales. Anyway, stay tuned – I’ll have a solution in a few short weeks.

And for those of you who can’t wait, my article on digital self distribution will hit the stands in an issue of Movie Maker Magazine. Hopefully this will be a good starting point for you.

If you are in a situation where you have a movie, but no deal – please feel free to leave a comment on this site, or email me directly. It will help me address your concerns.

And as always, if you want to stay up to date with the ever changing climate of filmmaking stuff, please feel free to sign up for my newsletter and also get a free copy of my book. Go here: www.FreeFilmmakingBook.com

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Related articles (things are changing in movie distribution):

• Distribution pact brings better streams to Netflix users (arstechnica.com)
• Netflix, Relativity Media Partner On Streaming Movie Service (informationweek.com)

Let’s face it, the old way of  indie filmmaking is over. No longer can you make a movie on spec and cross your fingers for theatrical distribution or even straight to video distribution. These old school distribution outlets are more like pipe dreams than a viable marketplace.

So what now?

Well – how about the future of filmmaking? But this time around, instead of being limited by a few territorial deals, you can (from your bedroom), market your movie to a global audience. In the following Filmmaking video, you will gain some insight how to market and sell your movie on the internet.

http://www.youtube.com/watch?v=x2oVXSOy16U

This is just the tip of the iceburg. For those of you who have a feature film on a book-shelve, it’s time to get it selling. In future videos, I will work to address all the new methods in digital self distribution of your movie.

If you’ve made a movie or you’re working to make your movie (and I hope you are), you might also be thinking about how you’re going to sell the sucker.

I mean, despite the fact that filmmaking is fun there is a business component to it. If you fail to think in terms of Return On Investment (ROI), then getting money for your next movie is going to be even more difficult than the first, for two reasons:

1. You’ll need to worry about money to put food on the table.
2. Your prospective investors will want to see your track record.

As a filmmaker, the other factor we have to consider is our initial budget. Go too high and the chance of return could diminish. Let me explain.

I’ve chatted with a few heavy-hitting friends in the industry (that I hope to interview soon) and there is talk about what I’m going to call the “no-man’s-land” of indie movie production. That is, there is a budget range from roughly 2.5M-10M that is becoming increasingly difficult to finance.

Tax credits and other deals aside – What I’m suggesting is due, in large part to changes in movie distribution and the subsequent challenge of generating enough revenue to recoup the initial investment.

Indie film financing was always a crap shoot – but take away potential sales channels and add the fact that technology now permits virtually anyone to make a decent looking movie and you can begin to understand why this is happening.

While I’m on the subject, I’m not just talking about the indie movies. I’m including studios as well. Thanks to the success of Paranormal Activity,  there is now word that Paramount is going to launch a micro budget division and begin to churn out movies under 100K.

From a business standpoint this makes sense. You invest 100K and you get 100M – That’s pretty good! (Understatement).  But from holy crap perspective, the ripple effect of a studio churning out no-to-low budget movies could potentially rip a hole in the ways Hollywood traditionally operates. (BTW, Paramount is not the first studio to attempt this. But thanks to VOD outlets and more digital projectors in theaters, what didn’t work at this budget level in the past could very well work now.)

Lets talk some numbers…

Traditionally, when movies are financed most people including grips, gaffers, craft services and other crew – they get paid on the front end as part of the movie’s budget. We can also include some agents, managers, lawyers, Teamsters, writers, actors – and mostly everyone else too.

On the micro budget level however, there isn’t enough money up-front to pay these folks what they were formally worth. So there are a few options. Hire less people. Hire non-union folks. And offer to pay Teamsters deferred pay with the added bonus of copy and credit. (I’m adding some humor here – but can you imagine Paramount trying to offer a Teamster deferred pay?)

Ok, so what does this mean for you and your movies? Well just look at the music industry. Recording studios and record companies took a nose dive. But that hasn’t stopped people from making music or making money making music.

Instead of asking some idiot in a suit for permission to make music, musicians can now find their audiences, build a following and sell their music… Without a middle man – globally. That’s pretty amazing.

The same wide open world applies to your movie. Do good work and people will notice. Do bad work, and well, you still have the opportunity to find the 20 people in the world who think you’re brilliant. And in terms of pay structure – I made a joke earlier about deferred pay. But I am not totally opposed to some well structured back end deals. I mean, 1/4th of 1% of 100M is – it’s nothing to sneeze at.

Of course, as we all know there is no guarantee that any movie project will make money. So for you and me and most indies, it will take roughly two years of hustle to churn out a movie that we can be proud of. For the studios, they are going to churn out micro-budget movies like widgets in a factory.  The odds of success, for both of us  – the indie filmmakers and the studio are getting closer equal.

And I think that is something worth celebrating.

Is anyone else excited about this? Please feel free to comment.

Today, I’m going to offer yet another bit of perspective on the whole question of how to raise money for movies.

As you may or may not know, independent film funding can be a little overwhelming. If you’ve ever dabbled in the business side of making a movie, you know what I mean. The first time I heard people talk about writing a business plan or offering a private placement memorandum, I suddenly felt like I was on another planet. And if you’re like most filmmakers, you would much rather focus on actually getting your movie made, instead of cold calling rich and successful people to set up random pitch meetings.

• So, the first challenge you have in the world of film finance is: How do I find investors for my movie?
• The second challenge is: How will my feature film provide enough ROI (return on investment) for my investor?

Assuming you’ve followed some of my previous advice on creating relationships with rich and successful people, even if you do make a favorable impression on a few rich folks, your potential film investors may still shy away from making an investment in your project. Why? Because without star talent, a known director, a film distribution outlet and an experienced crew – it’s very tough to answer the important question of ROI.

Your potential investors want to know how you plan on spending their money, how you plan on getting their money back, and when. Can you provide your investors with this information? If not, then you can understand why independent film financing, especially for your first feature, can be a pain in the butt.

However, having worked as an account executive for one of the biggest investment banks in the world, I would like to share some thoughts and end today’s article on a positive note. If you can come up with a plan that at least attempts to answer the question of ROI – then you’re in the ball park. While I can’t say it’s common, there are a few potential investors out there, for which their excess cash sometimes burns a hole in their pocket. These folks will assess the potential for gain and loss, and despite the risk (which you will always disclose and never hide!), they will still choose to do business with you.

I have a friend (who I’ll interview in a few weeks) – but anyway, he made a short film that went viral on the internet. One day he gets a call from a random multimillionaire who says he has always wanted to produce a movie. Suffice it to say, my buddy is now in pre-production on his first independent feature film.

Stranger things have happened. What’s important is that you keep pushing forward!

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If you are wondering how to get money for your movie – Almost every resource will tell you that you need a business plan. Very few resources will tell you how to actually go out, find prospective investors, qualify them, contact them, get a meeting and build a relationship.

Since getting money for movies was such a frustrating experience for me, I spent the last few months creating: The Independent Producer’s Guide To Financing Your Movie. In it, YOU will gain valuable insider experience so you can avoid my past mistakes, find investors and make your movie. To learn more CLICK HERE

I’m a producer, so when I write about screenwriting, I’m usually thinking in terms of budget, marketplace and return on investment. That being said, one thing many writers try to do is follow current movie trends and then pitch me on the marketability of the script and potential movie, not the quality.

I can think a few years back when natural disaster and Sci-Fi movies were popular. It seemed everyone was writing them. During that time, I can’t tell you how many pitches my production company got that sounded like this (note, many of the pitches used the buzz phrase Four-Quadrant) :

Dear Mr. Brubaker,

Are you looking for your next Four-Quadrant natural disaster, Sci-Fi movie? I have an idea that will blow you away. It’s about the end of the universe and involves spaceships and aliens and zombies and disease and it includes a love story. Please email me back today because this is going to make BILLIONS! And I can only wait a few minutes for your response before I pitch this to someone else.

Thanks!

Amateur Allen

I really wish I was kidding. But before you write this sort of email, please ask yourself: Do I need screenwriting help?

My point today is:

1. Write because you really enjoy what you’re writing.
2. Don’t pitch people who aren’t in the market for your product.
3. When you do pitch people, please don’t make assumptions about ROI.
4. I don’t know about you, but I’m sick of Four-Quadrant anything.
5. Please don’t pretend you have leverage until you do.